Publicis ends alliance with Dentsu

French advertising company Publicis Groupe buys back 18m of its own shares from Japanese marketing giant

Publicis president Maurice Levy presents the groups 2011 results in Paris. The French advertising group has ended its alliance with Japanese marketing giant Dentsu. Photograph: Eric Piermont/AFP/Getty Images

Friday 17 February 2012 06.02 EST
First published on Friday 17 February 2012 06.02 EST

Maurice Levy's Publicis Groupe has ended a decade-long strategic alliance with Japanese marketing giant Dentsu after buying out most of its stake in the French advertising group for €644m (£535m).

Publicis Groupe announced on Friday that it has bought 18m of its own shares from Dentsu for €35.80 each.

The deal, which leaves Dentsu with a stake of just 2.12% in Publicis, will significnantly boost the French company's earnings per share by 6% this year and 7% from 2013 onwards.

Levy said that the buyback triggers the end of a shareholder agreement and at times tense strategic alliance that Dentsu and Publicis Groupe began in 2003.

Dentsu originally took a 15% stake in Publicis Groupe following the French group's merger with rival Bcom3 in 2002.

"The partnership with Dentsu over the past 10 years has been amicable and exemplary," said Levy.

Two Dentsu executives have resigned from Publicis Groupe's supervisory board as a result.

Publicis said that the friendly relationship and collaboration between the two advertising giants would carry on.

They will continue to operate two joint ventures together – Beacon Communications and Dentsu Razorfish– as well as the Japanese company continuing to hold a 2.12% stake in Publicis Groupe.

"I am sure certain we will continue oour professional relationship in a fruitful manner," Levy said.

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